The president of the Argentine Chamber of Construction (CAMARCO), Gustavo Weiss, referred to the delay in payments for public works contracts and spoke of difficulties in importing inputs.
The president of the Argentine Chamber of Construction (CAMARCO), Gustavo Weiss spoke of the delays in contract payments by the State and warned about the impact of inflation on activity. “Contracts lose economic value month after month and payment delays, with rates of 8 to 10%, make a delay of one or two months very difficult to bear,” he said.
In radio statements with Radio Miter, Weiss maintained that although “There are many public works throughout the country, not only from the national government, but also from the provincial ones, the public works plan is difficult to carry out with these levels of inflation”. “Public works contracts have a price update system, with a polynomial formula with INDEC indices designed post-convertibility, to keep the values of the signed contracts constant but it deteriorates with these levels of inflation,” added the head of CAMARCO .
He also remarked that “the works linked to the WB and the IDB are quite up to date. But the works by agreement of the national government with the provinces or municipalities have more significant delays.”
“There are cases in the interior of five to nine months. These works are semi-paralyzed or paralyzed. Large works, such as ports, power generation plants, there are no. But there are investments in the railways and roads. The gas pipeline is financed and there is no problem, ” added.
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What are the causes of late payments, according to Weiss
Along these lines, he also held that “There are works of 20 thousand to 40 thousand million pesos that are important works and very difficult to finance in the situation we mentioned. The financial system does not strongly support them. Most of the construction companies in the country are SMEs. They are not overly large works but for companies they are important”.
As Weiss explained, payment delays are highly variable. For example, works that have international financing do not have any delay. But as the budget of the projects depends on ever lower levels of the State, the payments can be delayed up to 9 months.
And to the payment problems are added the obstacles to the importation of inputs and materials that leave the market every time there is an episode of exchange rate instability.
“We have serious input problems, especially imported inputs. Either totally imported products or products, materials that are manufactured in Argentina with some imported input. There are many materials in which there is no stock, there is no delivery, there is no price. Or the prices, quote a company, and they last 24 or 48 hours. Because manufacturers cannot guarantee or are not clear at what dollar they will be able to repurchase the input, so they cover themselves by quoting 24 or 48 hours of price validity. Or in some cases the budget directly in dollars”, concluded Weiss.
Source: Ambito
